Yet another one of Kushner Companies’ converted Brooklyn Heights properties, this one at 18 Sidney Place, is at the center of a class-action lawsuit. An investigation by the non-profit Housing Rights Initiative suggests that the firm has been “brazenly and systematically exploiting the rent stabilization program and violating New York State’s rent laws.”
If this sounds familiar, that is because it is:This summer, after looking into more than 50 of the firm’s holdings, HRI filed a class action suit on behalf of the nine tenants of 89 Hicks Street.
A brief history: Back in 2014, when Jared Kushner was still CEO (he stepped down from the family business in January after taking a senior advisor role in the White House), the company picked up six former Brooklyn Law School buildings in Brooklyn Heights for a combined $36.5 million. Three of those buildings were turned into huge single-family townhouses, and the other three, including 18 Sidney Place and 89 Hicks Street, were converted into market-rate rentals.
But HRI began looking into the rental histories of the buildings that were maintained as multi-family properites, and found some discrepancies. Here’s what we previously reported:
HRI alleges that when Kushner Companies bought the Hicks Street building—which was owned by the Jehovah’s Witnesses before Brooklyn Law School—it was legally obligated to make the apartments rent-stabilized, since the building dates to before 1974 and has more than six units. (It was temporarily exempt from the city’s rent-stabilization laws while being used for student housing.) However, per HRI, the developer “registered a mere 10% of its units as rent stabilized, instead of registering 100% of its units, as required by law.” (That translates into five out of 48 units.)
It seems that this was not an isolated incident. As with 89 Hicks, the lawsuit regarding 18 Sidney alleges that while the building was temporarily exempt from rent stabilization law when it was academic housing, it was legally required to be re-registered as rent stabilized once it was sold to a private landlord. Instead, according to HRI, Kushner Companies registered “a mere 11% of units as rent stabilized, instead of the 100% required by law.”
“Today’s class action at 18 Sidney Place validates the notion that Kushner’s misconduct was not an isolated event, but rather was part of a systematic scheme,” an HRI release states. “Together, these lawsuits provide a window into Kushner Companies' predatory business model.”